In a decisive move to safeguard the interests of depositors and ensure financial stability, the Maharashtra Cooperative Department has superseded the management of Yashwant Cooperative Bank Ltd., Phaltan, Satara district, following an order issued by the Reserve Bank of India (RBI).
The bank, registered under the Maharashtra Cooperative Societies Act, 1960, underwent a statutory inspection by the RBI for the financial year 2024-25. Persistent irregularities and regulatory violations observed during the inspection compelled the RBI to intervene.
The central bank issued a directive on May 28, 2025, expressing serious concerns over the bank’s operations, which it deemed detrimental to the interests of depositors.
Subsequently, the RBI directed the appointment of an Administrator to oversee the bank’s functioning, invoking powers under Section 110 A (1) (iii) of the Maharashtra Cooperative Societies Act.
Acting on this requisition, Deepak Taware, IAS, Commissioner for Cooperation and Registrar of Cooperative Societies, Maharashtra, appointed J P Shinde as administrator of the bank.
Concurrently, the RBI, exercising its authority under Section 35A read with Section 56 of the Banking Regulation Act, 1949, has imposed stringent operational restrictions on the bank effective from the close of business on May 29, 2025.
These restrictions include a prohibition on granting or renewing loans and advances without prior RBI approval, a ban on making investments, incurring liabilities, borrowing funds, or accepting fresh deposits, and limitations on disbursing payments or disposing of assets except as permitted by the RBI.
Additionally, withdrawals from savings, current, or other depositor accounts have been suspended, with an allowance only to set off loans against deposits. The bank is also authorized to incur expenditure strictly on essential items such as employee salaries, rent, and electricity bills.
The RBI’s directive aims to protect depositors and stabilize the bank’s liquidity position while ongoing supervisory concerns remain unaddressed. Despite prior engagement with the bank’s board and senior management, the lack of concrete corrective measures necessitated this regulatory intervention.
Depositors holding accounts up to Rs 5,00,000 (Rupees five lakh only) are eligible to claim insurance coverage under the Deposit Insurance and Credit Guarantee Corporation (DICGC). Depositors are advised to contact bank officials for claim procedures or visit the DICGC website at www.dicgc.org.in for further information.
The RBI emphasized that these measures do not amount to cancellation of the bank’s license, and banking operations will continue under restrictions until the bank’s financial health improves. The central bank will continue to monitor the situation closely and may modify or lift restrictions as warranted in the interest of depositors.
This landmark intervention underscores the stringent regulatory oversight in Maharashtra’s cooperative banking sector, aimed at safeguarding public trust and maintaining financial stability.
It is worth mentioning that BJP MP Medha Kulkarni strongly raised concerns about financial irregularities in the bank, pursued the matter persistently, and finally, the RBI took stringent action against the bank.